November 6, 2016

Enough countries joined the Paris Agreement for it to enter
into force, an amendment was approved to the Montreal Protocol to phase out
hydrofluorocarbons (HFCs), and a new global deal on
aviation was forged to curb the fastest growing sector of emissions.
It was a momentous month for global climate action.

However, as new climate policies and agreements begin to
take effect, businesses already had their eye on the ball. Last year, companies
in the U.S. signed more than 50 percent of wind contracts. Corporate renewables
deals have doubled year-over-year for the last several years.

Picking up on these trends, a new report from the Corporate
Eco Forum (CEF) and World Wildlife Fund (WWF), "Corporate
Renewable Energy Procurement: A Snapshot of Key Trends, Strategies, and
Practices in 2016," finds that corporate purchasers of renewable
energy are displaying an unprecedented level of ambition and leadership buying
clean energy at a scale that could prove to be a key piece of the climate
puzzle.

Of the 37 companies surveyed by CEF and WWF, representing
nine sectors with more than $1 trillion in combined annual revenues, more than
half have a renewable energy target — and half of those with a renewable energy
target are aiming for 100 percent renewable energy.

The survey highlights a few key trends dominating corporate
leadership on renewables:

1. Maximizing the impact of purchases

Companies increasingly want their renewable energy purchases
to be above and beyond what would have occurred without them; they want to
support new build that drives greater impact.

Traditionally, unbundled Renewable Energy Credits (RECs)
have been the predominant purchasing instrument. Unbundled RECs are still the
largest single instrument used by companies (27 percent of purchases) but
direct purchases (Power Purchase Agreements [PPAs], virtual PPAs, and onsite
projects) are now nearly two-thirds of purchases.

This shift toward direct procurement among those surveyed
confirms that leading companies are looking to capture the energy pricing
benefits of renewables alongside the environmental benefits.

2. Companies are looking to utilities to provide options

While most corporate purchases still do not involve a
utility, more companies are entering the market and looking for easier options
to directly buy renewable energy. Particularly in places where they have few
options, utilities are being called upon to deliver more bundled,
cost-competitive renewable energy offerings.

Utility green
tariffs showed up for the first time in this survey as a mechanism
companies are using to purchase renewables and they were rated as the second
highest policy priority to pursue after access to third-party PPAs.

3. Companies are focusing on key markets

Companies that participated in the CEF/WWF survey indicated
that California, North Carolina, New Jersey, Texas and Virginia are the current
hot spots for engaging in renewable energy policy.

Access to third-party PPAs was universally the top priority
across states but companies are looking to a variety of policy mechanisms to
increase access to more procurement options, depending on the state.

Closing the void

Analysis shows that using the Clean Power Plan (CPP) to
address electricity sector emissions would help the U.S. achieve just
50 percent of the necessary emission reductions to meet its pledge
under the Paris Agreement.

With companies’ demand for renewable energy already
reshaping the electricity landscape, the potential for their contributions to
close the gap should not be underestimated.

Ambition is growing and implementation is accelerating as
companies are moving fast to fulfill their public climate and renewable energy
goals, including an unprecedented number of companies setting 100 percent
renewable energy goals.

As more companies set targets, take advantage of emerging
procurement instruments and directly purchase cost-effective renewables such as
wind and solar, U.S. companies have a tangible role to play in driving down
U.S. emissions and closing the ambition gap.